Posted by RJWalker on October 12, 2001 at 14:27:34:
Thank you!
flipping lease options? - Posted by lou(tn)
Posted by lou(tn) on October 11, 2001 at 20:08:50:
I have been concentrating on quick flips and running across many potential lease options. I’m cash poor,as John Boy would say and need to build up a cash reserve.
I was wondering how one would structure a lease option deal and quickly flip it to a prospective a buyer without any further liability to the seller. I know you can add an assignment clause but does that release you from your origninal contractual obligation to the seller?
Re: flipping lease options? - Posted by Doug (ON)
Posted by Doug (ON) on October 11, 2001 at 20:24:53:
No further liability to the seller? I take it you mean you?
As has been mentioned many times. You need the seller to sign a liability release, even though your contract also says that you are released from liability when you assign your contract.
Keep in mind that you can’t get that much when you assign the contract you have with the seller to a buyer, because that assignment fee does not go towards the purchase price.
You’ll make way more money doing a cooperative assignment with the seller.
Doug
Re: flipping lease options? - Posted by lou(tn)
Posted by lou(tn) on October 12, 2001 at 07:29:38:
What is a cooperative assignment? I want to cash in on deals as they pop up but I don’t want to spread myself too thin. I want to concentrate on a certain type of deal until I get good at it. ie… quick flips in and out sort of deals. I don’t care if they are lease option strategies as long as I can get in, make some cash, and get out with no further liability.
thanks for your help Doug
Re: flipping lease options? - Posted by Doug (ON)
Posted by Doug (ON) on October 12, 2001 at 09:04:10:
Basically this is what happens in a coop deal:
You find the buyer.
You get the option fee.
The seller gets the monthly income, sale profit, and risk.
Obviously in a world where everything worked out perfectly, you would want to do sandwich L/O’s so that you get all of the profit. But in THIS world that means taking on risk, risk of vandalism, eviction, vacancy etc.
You say that right now you’re doing flips, as in wholesale flips? Well you can use L/O’s, coop assigns in particular, to expand your flipping business beyond junkers.
With a coop, you can take on NO risk beyond losing advertizing dollars if you can’t find a buyer. Of course this also means less profit, but when you do complete a coop deal, you have the best profit of an L/O, the upfront cash.
Doug
Re: flipping lease options? - Posted by RJWalker
Posted by RJWalker on October 12, 2001 at 10:52:27:
Where can I learn more about the in’s and out’s of doing this? Examples here anywhere? Anyone do this on a regular basis that can share a few starting hints?
Thanks in advance.
RJWalker
Re: flipping lease options? - Posted by Doug (ON)
Posted by Doug (ON) on October 12, 2001 at 13:40:40:
It’s pretty much the same as a sandwich L/O, which every course, and thousands of posts talk about. The difference comes after you’ve signed up the buyer. Instead of collecting the rent and staying in the middle of the deal. You assign your option with the buyer to the seller and cancel your original option with the seller.
I don’t know how many people are doing this.
Doug